Back in 2003, the economy lost anywhere between US$40bn to US$80bn on the back of plummeting travel and retail sales after the SARS outbreak highlighting the need for companies to diversify to better absorb global shocks. Fast forward to today, and the coronavirus has already infected more than 100K people across 81 countries with no confirmed treatment available yet.
One small positive that the coronavirus is responsible for, however, is speeding up the evolution of work and putting a spotlight on remote work and collaboration. In today's post, we look at the factors that have triggered an unplanned mass work-from-home experiment, discuss the drivers and challenges of the move, and the winners and losers of the switch.
The unplanned mass experiment
Companies across industries are feeling the impact of the coronavirus outbreak, with ones like retail and travel being hurt significantly. Global supply chains getting intertwined with an increasing dependence on China has meant that the Chinese slowdown has had cascading impacts on the world.
While reports by most research houses had placed the demand for work to spike by 2030 driven by Gen Z in the workforce, the outbreak of the coronavirus has probably cut our journey towards more folks working from home by a few years. We're being forced into the world's largest work-from-home experiment and, so far, it hasn't been easy for a lot of organizations to implement.
In a recent webinar snap poll, 91% of attending HR leaders from the Asia Pacific region indicated that they have implemented ‘work from home’ arrangements since the outbreak, but the biggest challenge stems from the lack of technology infrastructure and lack of comfort with new ways of working.
The drivers and the challenges
With better Internet infrastructure, rapid tech adoption, and a plethora of collaboration tools remote work doesn't sound that difficult to implement. But there is a fundamental issue here that is the element of trust and productivity.
Managers worry about the lack of visibility into the workflows and routines of their direct reports when employees work remotely. From an employee's perspective, Work from home has many advantages, including a flexible schedule, more time with family, and less time spent on commute. But this very lucrative policy has its own disadvantages such as inability to unplug, loneliness, and difficulty collaborating. Cross-departmental cross geographic work has also been a driver to boost remote work.
The computer manufacturer, Dell, wants to have 50% of its workforce working at least some of the time remotely by next year. Amazon recently hired 3,000 remote customer service workers, putting it in the top 10 for most remote jobs listed in 2018, above other well-known remote-friendly companies like UnitedHealth Group, Salesforce, and SAP. As a response to the COVID-19 outbreak, spreads across other parts of Asia, Europe, and the Middle East, major companies like Microsoft, Hitachi and Chevron have allowed their employees to work remotely to reduce the rapid spread of the disease.
The winners and losers of the switch
This trend is a strong positive for companies such as Slack and Zoom, which enable real-time connectivity and video conferencing through online platforms. From a stock market perspective, while the Virus is wreaking havoc on the markets, stock of certain companies such as Clorox, Netflix, and Zoom has actually risen. Ecommerce retailers and online delivery players, including restaurant chains that deliver could be beneficiaries of this trend as well.
While Work from home is an option for knowledge workers that span across service and IT industries, there are; however, industries wherein work from home cant be an option. Service workers in the travel, food, retail, and other industries don't have the luxury of allowing workers to do remote Work. The businesses in these industries will lose income, and it will have a severe impact on the job market as well. A rise in gig economy workers as a result of the move should help reduce part of the pain.
It increasingly looks like the trend towards remote work will only accelerate from here. With or without a virus outbreak. And the companies of tomorrow would do well to incorporate it in their plans.
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About the Author: The post is written by our EZPP partner Neha Jha. Neha is a graduate from Nanyang Business School and leads Operations at Radicali. She covers macro econ at ZappChai.